Exhibit 10.4
Employment Agreements between AsiaInfo Holdings, Inc.
and Xingsheng Zhang dated January 27, 2003
THIS AGREEMENT is made on the 27/th/ day of January, 2003
AMONG
(1) AsiaInfo Holdings Inc., a corporation organized under the laws of the State
of Delaware (the "Company"); and
(2) Zhang Xingsheng, with an xxxxxxx xx 0X, Xxxxx Xxxxx, Xxxxx World Center,
XxxxXxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxx 000000 (the "Executive").
WHEREAS:
The Company wishes to retain the Executive as an executive employee of the
Company, and the Executive wishes to be employed by the Company in such
capacity, all upon the terms and conditions hereinafter set forth;
IT IS HEREBY AGREED as follows:
1. DEFINITIONS
In this Agreement where the context so admits the following words and
expressions shall have the following meanings:
1.1 The "Board" shall mean the Board of Directors of the Company.
1.2 "Cause" shall means (i) Executive's willful and continued failure
substantially to perform his duties with the Company (other than as a
result of Executive's incapacity due to physical illness or injury); (ii)
Executive's willfully engaging in misconduct that is materially injurious
to the Company or engaging in fraud, misappropriation or embezzlement;
(iii) Executive's gross negligence in the performance of his duties that is
materially injurious to the Company; (iv) Executive's indictment for or
formal admission to a criminal offense; (v) Executive's failure to adhere
to the directions of the Board, to adhere to the Company's written policies
or to devote substantially all of his business time and efforts to the
Company; (vi) Executive's breach of any of the provisions of Section 6, 7
or 8 of this Agreement; or (vii) Executive's breach in any material respect
of any of the other terms and conditions of this Agreement if such breach
remains uncured for ten day's following written notice from the Company.
2. EMPLOYMENT
The Company shall engage and employ the Executive during the term hereof as
an executive officer of the Company having the title of Chief Executive
Officer (CEO) on the terms and conditions contained in this Agreement. The
Executive hereby accepts such employment and agrees diligently and
faithfully to serve the Company and to devote substantially all of his
business time and efforts, to the best of his ability, experience and
talent, to the furtherance and success of the Company's business.
The duties and responsibilities of the CEO will include, inter alia:
2.1 Drive operations to achieve the Company's goals and deliver superior
financial performance to the shareholders as measured against peers in the
industry
2.2 Grow revenues and profitability, currently targeted at an annual rate of
20%
2.3 Deepen and expand customer relationships
2.4 Mentor, cultivate and develop the Company's management talent
2.5 Define and implement the strategic and operational plans for the Company
2.6 Maintain close relationship and communication with the investment community
2.7 Develop partnerships for alliance and pursue mergers/acquisitions that
support the goals of the Company
3. TERM OF AGREEMENT
The Executive's employment hereunder shall be effective on the date which
the Executive reports to work, but no later than April 1st, 2003 (the
"Executive Date") and continue thereafter, unless sooner terminated in
accordance with Section 5, until the second anniversary of the Effective
Date; with such employment to continue for successive one-year periods
(subject to termination in accordance with Section 5) unless either party
notifies the other party of non-renewal in writing prior to 60 days before
the expiration of the initial term or relevant renewal term as applicable.
4. REMUNERATION
4.1 The Company shall, during the term of this Agreement, pay to Executive a
base salary (the "Base Salary") of not less than US$150,000 per year. Such
salary shall be subject to review in accordance with the Company's normal
practices for executive salary review, as from time to time in effect. Such
salary shall be paid in periodic installments (but not less frequently than
monthly) in accordance with the Company's normal mode of executive salary
payment.
4.2 In addition to the Executive's Base Salary, during the term of this
Agreement, the Executive shall be entitled to an annual bonus (the
"Incentive Bonus") of not less than US$100,000, provide that the financial
targets contained in the annual business plan approved by the board of
directors have been met. If the Executive has not provided services to the
Company during the full financial year to which such Incentive Bonus
relates, the Incentive Bonus will be pro-rated based on the Executive's
actual period of service in the relevant financial year. Notwithstanding
the provision above, the Incentive Bonus for the first full year shall not
be less than US$100,000 under any circumstances.
4.3 The Company shall, during the term of this Agreement, provide the Executive
with an allowance (the "Allowance") in an amount not exceeding US$80,000
per year which at the Executive's discretion, may be used for housing,
transaction, home country visits, child education and other reasonable
living expenses. The Company will pay the Allowance periodically against
the Executive's submission of expense reports, which shall be supported by
official receipts. Any unclaimed portion of the Allowance will be paid at
the end of the year.
4.4 In addition to the Executive's Base Salary, the Company shall grant stock
options to the Executive pursuant to the terms and conditions of separate
Stock Option Award Agreements between the Company and the Executive. Such
stock options grants shall consist of (i) an award on the Effective Date of
options to purchase common stock equivalent to 800,000 shares as of such
date; (ii) an award on the first anniversary of the Effective Date of
options to purchase common stock equivalent to 400,000 shares, subject to
the Executive's continued employment as of such date, and (iii) thereafter,
other awards as part of the Company's annual option grants to employees.
All such options will be priced at the fair market value of the underlying
common stock on the date of grant and shall be subject to the Company's
standard vesting schedules and the other terms and conditions set forth in
the applicable Stock Option Award Agreement.
4.5 Upon joining the Company, the Executive shall be awarded either restricted
stock in the form of shares of AsiaInfo, or stock options with immediate
vesting, with a value equal to US$200,000 at the then prevailing market
value. If restricted stock is issued, the Executive will set aside
US$100,000 of his own funds to either participate in an employee stock
purchase plan or purchase AsiaInfo stock on the open market.
4.6 During the term of this Agreement, Executive and his family shall be
entitled to participate in the medical and live insurance plans of the
Company.
4.7 The Company shall reimburse Executive for all reasonable and documented
business expenses incurred during the performance of Executive's duties to
the Company, in accordance with the Company's business expense
reimbursement policies.
4.8 During the term of this Agreement, Executive shall be entitled to
20-business days vacation during each calendar year.
5. TERMINATION OF EMPLOYMENT; SEVERANCE
5.1 Executive's employment hereunder may be terminated by either the Company or
the Executive at any time for any reason upon not less than 30 days prior
written notice to the other party, and subject to the other provisions of
this Section 5.
5.2 In the event of Executive's death or disability (which shall mean that, as
a result of illness or injury, Executive is unable substantially to perform
his duties hereunder for a period of at least 30 consecutive business days,
or a total of at least 30 business days in any period of 365 consecutive
days), Executive's employment hereunder shall automatically terminate on
the date of death or disability, as the case may be, in which event neither
the Executive nor his estate shall have any further rights hereunder except
to receive:
(a) the unpaid portion of the Base Salary accrued to the date of death or
disability;
(b) the pro-rata portion of the Incentive Bonus that would otherwise be
payable to the Executive in the event his employment hereunder were
terminated by the Company without Cause;
(c) reimbursement for any reasonable and documented business expenses
incurred during the performance of the Executive's duties for which
the Executive shall not have theretofore been reimbursed; and
(d) any death or disability benefits maintained by the Company in respect
of the Executive.
Payment pursuant to Section 5.2(a) and (b) shall be made at the same time
any such payment would have been made if such termination had not occurred.
5.3 If Executive's employment hereunder shall be terminated by the Company
without Cause, then Executive shall be entitled to:
(a) severance compensation equal to 100% of Executive's then-current Base
Salary for a period equal to the Severance Period (as defined below);
(b) medical and disability insurance and other benefits of the Executive
at the time of termination for a period equal to the Severance Period.
Such severance compensation payments shall be paid in a lump sum within 60
days of the date of termination.
5.4 If the Executive's employment hereunder shall be terminated by the Company
for Cause, or voluntarily terminated by the Executive, the Company shall
have no further obligations to the Executive except for compensation or
other benefits due for the period prior to the date on which a notice of
termination is given.
5.5 As used in this Section 5, "Severance Period" shall mean the applicable
period set forth below beginning on the effective date of termination of
employment:
(a) if Executive's employment hereunder is terminated within six years
after the Effective Date, a period of six months; and
(b) if Executive's employment hereunder is terminated more than (six)
years after the Effective Date, a period of nine months plus 30 days
for each year of Executive's employment with the Company beyond the
first seven years of such employment, but in no event shall the
Severance Period be longer than 18 months.
6. CONFIDENTIAL INFORMATION
6.1 Executive agrees that he will not, during the period of his employment
hereunder and for a period of one year thereafter (regardless of the reason
for termination), use or divulge to any person, corporation, partnership or
other entity any confidential or proprietary information concerning the
Company or any of its respective affiliates for the benefit of anyone other
than the Company or disclose any such information to others except in the
course of the business of the Company or as required by law.
6.2 The obligations contained in Section 6.1 shall cease to apply to any
information or knowledge, which may subsequently come into the public
domain after the termination of employment other than by way of
unauthorized disclosure.
7. NON-SOLICITATION OF EMPLOYEES
The Executive shall not for a period of one year from the date of the
Executive's employment with the Company has been terminated (for any
reason), without the prior written consent of the Company, direct, induce,
encourage or otherwise cause any other officer or employee of the to
terminate employment with the Company.
8. NON-COMPETITION
The Executive shall not for a period of one year from the date of
Executive's employment with the Company has been terminated (for any
reason), without the prior written consent of the Company, accept or
procure any ownership interest in, employment with, or provide any
consulting services to, any other person, corporation, partnership or other
entity that competes with the Company, either directly or indirectly, in
the People's Republic of China; provided that nothing contained herein
shall be construed to prevent Executive from owning less than 1% of the
outstanding stock of any competing corporation that is traded and listed on
a recognized international securities exchange, but only if Executive is
not actively involved in and does not render consulting services to the
business of such corporation.
9. GOVERNING LAW
This Agreement shall be construed, interpreted and governed in accordance
with the laws of the State of Delaware, the United State of America.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the date first above written.
ASIAINFO HOLDINGS INC.
Xxxxx Xxxx Xingsheng Zhang
________________________ ________________________
Name: Xxxxx Xxxx
Title: CEO & President
